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UPDATE 1-Russian steelmaker Severstal sees higher prices in second quarter
April 30, 2014 / 6:32 AM / in 4 years

UPDATE 1-Russian steelmaker Severstal sees higher prices in second quarter

* Posts net loss of $100 mln due to FX loss

* Excluding FX loss, outperforms analyst forecast

* Shares up 0.4 pct in Moscow (Adds detail, CEO quote, share price)

MOSCOW, April 30 (Reuters) - Severstal, Russia’s second-biggest steel producer, on Wednesday reported a first-quarter net loss of $100 million, due to a foreign exchange loss and forecast higher steel prices in the second quarter.

Steelmakers have been battling low steel prices ST-CRU-IDX and weaker demand in the past three years, but confidence in the sector, a major industrial indicator, has improved slightly, even while large overcapacity persists.

“Whilst market conditions in the second quarter will remain challenging, we anticipate higher steel prices across our key markets,” chief executive Alexey Mordashov said in a statement.

Excluding the $321 million foreign exchange loss, Severstal would have posted net profit of $221 million in the first quarter, 45 percent higher than an average forecast from a Reuters poll of analysts who had not accounted for the loss.

The firm, controlled by billionaire Mordashov, said earnings before interest, taxation, depreciation and amortisation (EBITDA) were up 24 percent year-on-year at $534 million, while revenue fell 9.5 percent to $3.0 billion.

Severstal earlier on Wednesday said it recommended a divided of 2.43 roubles ($0.07) per share for the first quarter. The company’s shares were up 0.4 percent in Moscow, outperforming the broader market. (Reporting by Alessandra Prentice, Editing by Lidia Kelly and Jane Merriman)

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